RealNetworks asks Apple to open up Fairplay DRM

In a surprising move, RealNetworks is asking Apple to open up their Fairplay …

If RealNetworks has their way, you will soon be able to download music from the Real Music Store to your iPod. RealNetworks CEO Rob Glaser is proposing (registration required) a "tactical alliance" between Real and Apple against Microsoft in the burgeoning digital music business. RealNetworks wants to license Apple's Fairplay DRM system, so that their customers can play downloads from their music services (Rhapsody and the Real Music Store) on their iPods. RealNetworks would then make the iPod its "primary device" for the music store and the RealPlayer software. Glaser also hints that Real might end up switching to WMA, which is somewhat surprising given RealNetwork's history with Microsoft.

The message notes that both RealNetworks and Apple support the same digital music technology standard, known as AAC. But because it is not possible for RealNetworks' encrypted music services, Rhapsody and the Real music store, to be played on iPod, RealNetworks is considering switching to Microsoft's competing WMA format, which would make the RealNetworks services work seamlessly with Microsoft's technology. "We are seeing very interesting opportunities to switch to WMA," Mr. Glaser wrote. "Instinctively I don't want to do it because I think it leads to all kinds of complexities in terms of giving Microsoft too much long-term market momentum."

Will Apple bite? Probably not, as they are currently doing just fine staying the course. However, given that the iTMS exists primarily to sell iPods and not make a profit in and of itself, it wouldn't hurt Apple to open up Fairplay to RealNetworks. They might lose some online music sales, but the trade-off of more iPod sales would be more than worthwhile. Allying with RealNetworks would also be a tactical move against Microsoft and would likely encourage other music stores to offer Fairplay AACs. Any loss of revenue from music sales could even be replaced by licensing revenues. Glaser is hoping to meet with Jobs this week ? stay tuned.